OpenTuition.com Free resources for ACCA and CIMA students

Free ACCA and CIMA on line courses | Free ACCA , CIMA, FIA Notes, Lectures, Tests and Forums

Technical Problems

If you can't download lecture notes or have problems with watching lectures please visit the support page>>

Donate

DonateIf you find OpenTuition study materials useful in your studies, please聽consider making a donation - it will help us enormously to be able to expand and improve the resources that we offer.

Donate here

Comments

  1. Hi sir, If I received some cheques from some clients in September, I would debit the bank and credit the Receivables but I never lodge those cheques until October. Is those cheques recorded as cash in hand on the balance sheet? Or they are still apart of the bank but is recorded is added as outstanding lodgement on the bank reconciliation

    • The cheques are entered in the cash account as received when the cheques are received. If they have not yet been paid into the bank, then they also appear on the reconciliation statement as outstanding lodgements.

      • In the financial statements we normally don’t show cash in hand and cash at bank separately.

        With regard to what the auditor has told you – that is correct and is what I wrote in my previous reply.

        The cheques received are entered in the cash amount when they are received and therefore do appear as an asset in the financial statements. If they have not been paid into the bank then they also appear on the bank reconciliation statement, otherwise the cash balance will not agree with the bank balance.

        Have you watched the further lectures on bank reconciliations?

      • Yes sir I did. However, the auditors do show Cash in Hand different from Cash at Bank on the balance sheet. Hence why I am saying it shouldn’t be shown as cash in hand because they use the cash in hand only for the petty cash.

  4. Sir, I just had a general question from this lecture.
    What is a Journal entry for payment of electricity bill through credit card?
    Do you open a new account for credit card or Credit bank account?

    • Assuming that the credit card is one that sends a monthly statement to pay, then you would credit an account for the credit card.
      (Some credit cards take the money directly from your bank account, in which case you would credit cash).

      However, as I do say in the lectures, credit card transactions are not examined in Paper F3. The reason is that we are looking at businesses, and although some businesses do use credit cards, in most cases they are used by individuals (who might then claim from the business).

  6. Sir, i have a doubt. The Foll. is a T- account- capital a/c. What should i understand when income statement is 400 and how do I know when to write this?

    Capital a/c
    Drawings 100 Cash 5000
    Income Statement 400
    Balance 5300

    • In future please ask questions in the Ask the Tutor Forum – not as a comment on a lecture about something completely different 馃檪

      In the exam you can not be asked to prepare t-accounts – sometimes they are useful in your own workings, but that is really all.
      The amount owed to the owner (the capital) increases due to any profit (from the income statement) and decreases due to any drawings. That is all that is happening here.
      You should watch the lecture on chapters 2 and 3 of the Lecture Notes where this is all explained.

Leave a Reply